AKC News // Construction industry seeks help

The construction sector is to demand a multi-million euro economic stimulus package from the Taoiseach Brian Cowen to boost building industry which is coping with an estimated 42% drop in house completions this year.

The measures sought are set to include a US-style temporary tax break for firsttime buyers, similar to one currently being considered by the US Congress.

Under the proposed US package, firsttime buyers who earn under €44,300 would receive an income tax credit of €4,750.

Construction Industry Federation (CIF) director-general Tom Parlon declined to comment on what specific measures his body would seek but said it has been studying the US package.

Parlon said the package would be a temporary measure, which he hoped the government would pass quickly. "It doesn't have to wait for the budget to come through." He said that the stimulus package was needed, not because of a crisis in house building, but to combat the negative sentiment still surrounding the housing sector.

The CIF will argue to Cowen that although the package will assist its members, boosting the housing market is a national economic imperative.

Sources indicated that the organisation believed that increasing housing output by 10,000 units would add a much needed 1% to national economic growth.

Although some developers have been able to sell houses, others have been forced to engage in heavy discounting and housing completions have continued to fall.

Although the CIF still forecasts that 45,000 units will be completed this year, it now believes that just 37,000 homes will be built next year. This is well below the estimated long-term need for 60,000 new homes a year.

It is understood that the decision to seek a stimulus package has been the subject of intense debate within the CIF with some members arguing that it sent out the wrong sign about the market.
Source: Ken Griffin, www.tribune.ie